On January 21, 2026, Chairman John Boozman of the United States Senate Committee on Agriculture, Nutrition, and Forestry (“Senate Ag”) released updated legislation on crypto market structure titled the “Digital Commodity Intermediaries Act.” In November 2025, Senate Ag previously released a bipartisan discussion draft building on the Digital Asset Market Clarity Act of 2025 (“CLARITY Act”) passed by the House of Representatives last July. The updated Senate Ag legislation, while not bipartisan like the discussion draft, takes much of the Senate Ag’s previous discussion draft and focuses more directly on digital asset intermediaries, but still leaves open the treatment of DeFi protocols. This memo discusses the key differences between the updated legislative text and the Ag Senate Discussion Draft that we previously summarized and analyzed.
Definitions
The Senate Ag’s earlier discussion draft left open a number of key definitions that were bracketed and subject to further negotiation. The parentheses have been removed and the updated legislative text now incorporates definitions relating to blockchain and decentralized finance from the House CLARITY Act, and includes exclusions found in the Senate Banking Committee’s bill for a person or group of persons under common control or an agreement to act in concert with respect to decentralized governance systems. Additionally, the legislative text incorporates network tokens and certain ancillary assets, which were included in the Senate Banking Committee’s recently released bill, as digital products. The legislation maintains the same exclusions from the Discussion Draft’s definition of a digital product, i.e., any security, any security derivative, permitted payment stablecoins, bank deposits, commodities, pooled investment vehicles, and collectibles (but allows the CFTC to determine whether series of mass-issued items that are substantially similar, interchangeably marketed and sold, and speculative in nature are digital products). Notably, memecoins were added to the definition of a digital asset.
Other issues previously bracketed in the discussion draft regarding the treatment of decentralized financial protocols and blockchain developers without oversight, the registration of commodity pool operators and commodity trading advisors, as well as provisions relating to the Bank Secrecy Act and anti-money laundering are not addressed by the updated legislative text.
Rulemaking
The legislation maintains the requirement for joint rulemaking by the SEC and CFTC for exchanges and intermediaries, mixed digital asset transactions, portfolio margin transactions, and conflicts of interest (which were previously in brackets) that were in the discussion draft. However, the legislation adds rules on the process of delisting an asset for trading purposes, as well as leveraged, margined, or funded digital commodity transactions. The legislation maintains the overall rulemaking deadline for rules and regulations to be promulgated no later than 18 months after promulgation.
Registration frame
While preserving the registration regime for digital commodity exchanges, brokers and dealers in digital commodities that was outlined in the Discussion Draft, the updated legislation now provides for expedited registration and provisional status with the CFTC. This expedited registration process would take no more than 180 days after enactment, with registered entities remaining in provisional status until 270 days after the final effective date of the regulations. Persons granted provisional status would be permitted to transact digital assets prior to the registration date until rulemaking on definitions is completed and effective. Designated contract marketplaces and futures commission traders already registered with the CFTC would not be required to re-register as long as written notice is provided to the CFTC (and for future commission traders and any self-regulatory organization of which they are members). Entities considering becoming a digital commodities exchange, broker-dealer or trader should consider registering with the CFTC now before CFTC staff get bogged down in rulemaking and registrations get stuck in a long queue.
For digital commodity exchanges, the legislation maintains the prohibition on digital commodity exchanges acting as a counterparty for their own account, but now includes an exception that would allow a digital commodity exchange to trade for its own account as long as the trading is not solely for profit. The exception includes transactions entered into at the direction of an unaffiliated client, provision of liquidity, and risk mitigation coverage. Other rules will establish appropriate requirements for reliance on these exceptions. Digital commodity exchanges would also be required to establish policies and procedures permitting trading of a digital commodity only if information has been filed with the SEC and similar information relating to the blockchain system’s ongoing development plan is provided to the public. While digital commodity exchanges would be required to hold customers’ digital assets with qualified digital asset custodians, the CFTC would have the ability to exempt digital commodity exchanges if doing so would be consistent with the public interest and the exemption would not have a material adverse effect on the CFTC or the exchange’s ability to carry out its regulatory or self-regulatory obligations. Foreign digital product exchanges may also be exempt from registration for two years if the exchange is subject to comparable and comprehensive supervision and regulation in its home country. The legislation also contains a provision providing for the appointment of a trustee upon application by the CFTC to a federal district court in the event of suspension, revocation, or withdrawal of registration of the digital commodity exchange. This appears to be a nod to FTX’s prior bankruptcy proceedings and could lead to a potential overlap for digital commodities exchanges that find themselves in bankruptcy. The legislation also retains the federal preemption section giving the CFTC exclusive jurisdiction over any registered digital commodity exchange with respect to its activities and transactions.
Likewise, the federal preemption provision in the legislative text gives the CFTC exclusive jurisdiction over any registered digital commodities broker or dealer, and allows the CFTC to exempt digital commodities brokers or dealers if the exemption would be consistent with the public interest and would not have a material adverse effect on the CFTC in carrying out its self-regulatory obligations, or if the digital commodities broker or dealer is subject to oversight and to comparable and complete regulations in its country of origin. Additionally, the legislation provides that brokers and dealers in digital commodities may hold customers’ digital commodity assets in a portfolio margin account carried as a futures account or cleared swaps account, or an SEC-approved securities account. The legislative text also addresses participation in “blockchain services,” which presumably encompass staking and liquidity provision, by digital commodity brokers and dealers. Policies and procedures must be implemented to accommodate this additional responsibility.
Protections and resources for developers
Although the bracketed section of the draft discussion relating to the treatment of blockchain developers without oversight is excluded from the legislative text, a section on protecting software developers has been added. Software developers engaged in activities related to the operation of a blockchain system or decentralized financial trading protocol, such as compiling network transactions, providing computational work, and/or providing a user interface that allows a user to read and access data on a blockchain system, are excluded from coverage. However, these developers may still be subject to anti-fraud, anti-manipulation or misrepresentation measures.
In the “Resources for Implementation” section, the legislation now clarifies that fees must be collected from registered digital commodity brokers and dealers, digital commodity exchanges, and qualified digital asset custodians upon filing their initial registration application and annually thereafter. This specification is particularly noteworthy because it distinguishes digital asset filers from market participants in the agriculture and energy sectors, which also fall under the CFTC’s jurisdictional mandate.
Conclusion
The updated legislation builds heavily on the Ag Senate Discussion Draft and remains focused on digital asset intermediaries. Although the legislative text avoids the treatment of decentralized trade protocols compared to the recent Senate banking bill, the legislative text shows some early signs of incorporating portions of the Senate banking bill. The legislation also nods to the House CLARITY Act by providing expedited registration and provisional status for digital commodities brokers, dealers and exchanges.
A review of the legislative text from the Senate Agriculture Committee is scheduled for a hearing on January 29, 2026. If the bill passes, it will need to be reconciled with the Senate banking bill (which is awaiting a new hearing date) and then reconciled with the House CLARITY Act.
